5 Best Secured Credit Cards to Rebuild Credit

Building credit is no easy feat. Even if you know all the tips and tricks, it can take time for your new good habits to make a meaningful difference in your credit score.

Using credit cards to build credit is one of the best strategies around because you can do it for free – but only if you pay your bill in full by the due date each month. Unfortunately, most credit cards are only available to people with good credit.

But don’t worry — banks offer secured credit cards for people who are just starting out or who are trying to rebuild their credit. Learn more about how secured cards can help you build credit and the best cards to try out.

What is a secured credit card?

Secured credit cards function similarly to conventional credit cards. The main difference is that secured cards require collateral in the form of a cash deposit. That way, if you fail to make your payments, the bank can use the deposit to cover its losses.

Using credit cards to build credit works if you do it right. The two most important factors in your credit score are your payment history and how much you owe. Part of the second factor is the size of your credit card balance relative to your credit limit.

Using a secured credit card a little each month and paying it completely off on time satisfies both of these factors. The result is that you’re building credit without paying interest like you would with a credit-builder loan.

What to look for in a secured credit card

As you’re researching credit cards to build credit, keep an eye out for certain features. Specifically, take note of fees, interest rates, and confirm that the bank reports your activity to the major credit bureaus.

It’s possible to get a secured card with no annual fee and a relatively low interest rate. Some even offer rewards.

Products

Company

Student Loan Hero, Inc. is helping 200,000+ borrowers manage and eliminate over $3.5 billion dollars in student loan debt. We're on a mission to help 44 million Americans manage their student loans smarter.

Disclaimers: Product name, logo, brands, and other trademarks featured or referred to within Student Loan Hero are the property of their respective trademark holders. Information obtained via Student Loan Hero™ is for educational purposes only. Please consult a licensed financial professional before making any financial decisions. This site may be compensated through third party advertisers. This site is not endorsed or affiliated with the U.S. Department of Education.